PDEX earnings analysis
What we found in PDEX's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Pro-Dex delivered strong fiscal 2026 operating growth, with revenue up 16%, diluted EPS up to $4.12, and operating cash flow recovering to $7.242 million. The core orthopedic franchise benefited from a next-generation handpiece launch and a customer contract extended through 2028, while APM adds vertical integration and aerospace/defense exposure. However, 78% customer concentration, a backlog decline from $50.4 million to $32.9 million, and the ongoing erosion of legacy repair revenue temper the outlook; reported earnings also benefited from $5.655 million of net gains on marketable equity investments.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Strong Revenue and Earnings Growth
- Fiscal 2026 net sales increased 16% to $77.548 million from $66.593 million, while gross profit rose to $24.335 million from $19.510 million and operating income increased to $12.991 million from $10.689 million. Diluted EPS increased to $4.12 from $2.67.
- Orthopedics Drives Medical Growth
- Medical-device revenue rose 30% to $62.098 million and represented 80% of sales. Orthopedic revenue increased 46% to $48.804 million, driven largely by the largest customer’s next-generation handpiece launch.
- Contract Extends Through 2028
- The largest customer amended its contract to extend through 2028 and provide higher volumes of its newest surgical handpiece. Management expects similar levels of orthopedic revenue through 2028, although customer distribution-network visibility remains limited.
- APM Adds Aerospace and Integration
- Pro-Dex acquired APM on February 9, 2026 for total consideration of $8.650 million, including $6.650 million in cash and a $2.000 million seller note. APM broadens the customer base, supports vertical integration, and contributed $719,000 of fiscal 2026 revenue after acquisition.
- Liquidity Improved Materially
- Cash provided by operating activities improved to $7.242 million from $1.682 million of cash used in fiscal 2025. Cash and cash equivalents increased to $8.192 million from $419,000, and the company had $11.0 million available under its revolving loan at June 30, 2026.
- Continued Share Repurchases
- The company repurchased 79,898 shares for $3.4 million during fiscal 2026, reducing shares outstanding to 3,186,135 from 3,261,043. Since 2013, cumulative repurchases totaled 1,591,395 shares at an aggregate cost of $27.6 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Extreme Largest-Customer Concentration
- Customer concentration increased in importance: Customer 1 generated $60.742 million, or 78% of fiscal 2026 sales, and represented $17.403 million, or 81%, of gross accounts receivable. A reduction, delay, or loss of this customer’s orders would be material.
- Backlog Declined 35%
- Backlog fell to $32.9 million at June 30, 2026 from $50.4 million one year earlier. Management attributes the decline to timing, but also states that bookings can vary with new-product launches, end-user demand, and customer inventory levels.
- Repair Transition and Inventory Risk
- Legacy repair revenue declined $6.0 million, or 33%, to $12.540 million as the largest customer transitions to its next-generation handpiece; management expects repairs of the legacy product may continue to decline and does not yet know the volume of billable next-generation repairs. Inventory and warranty charges also rose to $1.122 million from $264,000, primarily due to reserves for a complex part used in the new handpiece.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.12
- Gross margin
- 31.0%
- Operating margin
- 17.0%
- Segment
- Medical Devices: $62.098 million, 80% of sales, up 30% year over year; Orthopedic $48.804 million, CMF $11.233 million, Thoracic $2.061 million
- Segment
- Repairs: $12.540 million, 16% of sales, down 33% year over year
- Segment
- NRE & Prototype Services: $1.650 million, 2% of sales, up 136% year over year
- Segment
- Industrial and Scientific: $1.513 million, 2% of sales, up 76% year over year, primarily reflecting APM sales
What they said about what is next.
The 10-K does not provide quantitative annual revenue or EPS guidance; outlook is discussed qualitatively. Management expects orthopedic sales at similar levels through 2028 under the amended largest-customer contract, while future APM contribution and next-generation repair volumes remain uncertain.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 30, 2026
- Pro-Dex, Inc. reported strong revenue growth driven primarily by its medical device sales, with significant increases in revenue and earnings per share compared to the previous year. Despite some declines in repair…
- 10-Q · January 30, 2025
- Pro‑Dex reported a strong quarter with net sales of $16,793,000 (up $4,205,000 or 33.4% vs. $12,588,000 a year ago) and diluted EPS of $0.61 (vs. $0.14 prior year). Gross margin expanded to 30.2% and operating income…
- 10-Q · October 31, 2024
- Pro‑Dex reported Q1 net sales of $14,892,000 (up $2,954,000 or ~24.8% vs. $11,938,000 a year ago) with gross profit of $5,150,000 and operating income of $3,013,000. The company generated diluted EPS of $0.75 and…
- 10-K · September 5, 2024
- Pro‑Dex reported fiscal 2024 revenue of $53.844 million, up from $46.087 million in fiscal 2023, driven primarily by medical device sales and increased repairs. The company finished build-out and moved assembly/repairs…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing PDEX makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever